One big part of Apple Pay is being able to leave your credit cards at home, and keep your wallet thinner.
I also got an Apple Store gift card for Christmas which was credit card-sized and as thick. I scanned it into Passbook on my iPhone, and they scanned the virtual card at my Apple Store when I made a purchase.
The total was more than the card amount, and I used Apple Pay to pay the balance.
Now that's seriously convenient!